Home prices are on the rise in Muskego and New Berlin — or are they?
Regardless, agents see reason for confidence
Statistics suggest local home prices are going up, but to some extent the figures can be misleading.
Median home prices climbed 6.6 percent last year over 2012 in Muskego and New Berlin, outdistancing the 4.4 percent countywide, according to year-end statistics compiled by the Multiple Listing Service. The average sale price in the four-county area the Greater Milwaukee Association of Realtors covers rose 7 percent last year to $225,668.
However, in its year-end report, the association cautions that average prices may have increased in part because there were fewer foreclosed properties weighing the averages down rather than increases purely based on normal market forces. The Greater Milwaukee Association of Realtors report notes that only 7 percent of homes sold in 2013 were foreclosures, a bit more than half the 12 percent in 2012.
It's possible that sale prices of nonforeclosed properties could be relatively unaffected but the apparent rise, the report says.
Two other factors tended to push average sale price higher, the association report says. One was that higher prices were being paid for foreclosed properties. The other factor was the larger number of homes being sold in last year counteracted the drag of the low prices on foreclosures.
While the latter two factors could affect Muskego and New Berlin average home prices, the number of foreclosures barely fell at all from 2012 to 2013, according to the MLS. Foreclosures were 7.7 percent of total home sales in 2012 and 7.5 percent in 2013.
Climbing back up
The Multiple Listing Service uses median sales prices, but the average home price was $267,623 in Muskego and $239,922 in New Berlin, said Re/Max Realty 100's Jeff Benson, who has been in the real estate business since 1976.
Although prices are making progress, Benson figures they still have about 8 percent to go before getting back to where they were in 2007 before the bubble burst.
In 2007, the average sale price was $291,212 in Muskego and $262,624 in New Berlin, Benson said. But prices can get there.
"What's going to continue to move us forward is more jobs for consumer confidence," he said.
Jay Baumgartner of the Baumgartner Group in New Berlin, a Shorewest Realtors agency, also looked back on the home selling market in Muskego and New Berlin last year saying, "Demand was a lot stronger."
"I think people were realizing the worst of the market is behind us and prices are as low as they're going to get," he said. "They realized the bottom has come and gone."
The market was especially strong in Muskego, he said.
"Muskego is heating up," Baumgartner said, mainly because home building is going forward and people like the rural feel of a community that is still close to downtown Milwaukee and shopping.
Reasons for confidence
Both local real estate experts foresee continued recovery in 2014.
"The pace may be a little slower," Baumgartner said. "But the trajectory is still upward."
Buyers may find prices a bit higher because real estate agents might try for prices closer to where they once were.
"I'm a lot more confident now to try for more," he said.
Benson said that employment is inching up and people are starting to feel more confident that the country is coming out of the recession. Those factors should impact the real estate market, and "I expect 2014 to be a nice steady recovery," he added.
A LOOK AT HOME SALES STATISTICS
|Median sale price 2013||Median sale price 2012||Difference||Highest median sale price available since 2007||Lowest median since 2007|
|$230,000||$215,825||6.6%||$238,000 in 2008||$207,000 in 2011|
|Waukesha County||$235,000||$225,000||4.4%||$240,000 in 2008||$220,000 in 2011|
|Four-county metro area||$225,668 (average)||$211,177 (average)||7%||N/A||N/A|
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